He describes it as a “family theme park unsuitable for small children” – and with the Grim Reaper whooping it up on the dodgems and Cinderella horribly mangled in a pumpkin carriage crash, it is easy to see why.

Banksy’s new show, Dismaland, which opened on Thursday on the Weston-super-Mare seafront, is sometimes hilarious, sometimes eye-opening and occasionally breathtakingly shocking.

The artist’s biggest project to date had been shrouded in secrecy. Local residents and curious tourists were led to believe that the installations being built in a disused former lido called Tropicana were part of a film set for a Hollywood crime thriller called Grey Fox.

The name is a play on Disneyland, but Banksy insisted the show was not a swipe at Mickey and co. “I banned any imagery of Mickey Mouse from the site,” he said. “It’s a showcase for the best artists I could imagine, apart from the two who turned me down.”

Works by 58 handpicked artists including Damien Hirst and Jenny Holzer have been installed across the 2.5-acre site. Julie Burchill has rewritten Punch & Judy to give it a Jimmy Savile spin. Jimmy Cauty, once part of the KLF, is displaying his version of a fun model village complete with 3,000 riot police in the aftermath of major civil unrest.

In one tent would-be anarchists can find out how to unlock the Adshel posters seen at bus stops. For £5 people can buy the tools to break into them, replacing the official posters with any propaganda they please. Is it legal? “It’s not illegal,” said the vendor.

Across the way is a “pocket money loans” shop offering money to children at an interest rate of 5,000%. In front of its counter is a small trampet so children can bounce up to read the outrageous small print drawn up by artist Darren Cullen.

Cullen said he had met so many people taking out payday loans who were well aware of how ridiculous the payback was. “As the welfare state is retreating the market is filling the gap in a really predatory way. People are being saddled with insane amount of debt for years.”

Like other artists involved, he has never met Banksy, but he was delighted to be part of the show.

“This place is brilliant. I only knew the minimum amount before I got here,” he said, “but it is so cool. It is just amazing having this much sarcasm in one place.”

The Comrades Advice Bureau, where people are shown how to get into bus stop advertising. Photograph: Alicia Canter for the Guardian

Other highlights include the Jeffrey Archer Memorial Fire Pit where visitors can warm themselves around a daily burning of the local lord’s books; a model boat pond with dead bodies and overly crowded boats full of asylum seekers; and a puppet revue show constructed from the contents of Hackney skips.

In the moat around the castle is an armour-plated riot control vehicle built to serve in Northern Ireland which is now a children’s slide.

Banksy himself has created 10 new works, including the Cinderella crash in a large castle. Visitors walk in to discover the pumpkin carriage crashed, Cinderella and horses dead, and paparazzi madly taking photos. As people leave they will get their own souvenir photograph in front of the carnage.

The artist has paid for everything himself but a spokeswoman was unable to say if he was recouping his costs or making a profit. The show will run until 27 September, for 36 days, with 4,000 tickets a day at £3 each all available to buy online at dismaland.co.uk. That amounts to just over £400,000, so it is difficult to see a great profit given the obvious expenses.

Weston-super-Mare itself will undoubtedly benefit. The lido, which opened in 1937 and once boasted the highest diving boards in Europe, has been closed since 2000.

Banksy’s Cinderella crash scene. Photograph: David Levene for the Guardian

Only four people at the local council knew about the project, one of those its Tory leader, Nigel Ashton. “There was no need for people to know,” he said, although clearly someone had to say yes. “I gave it a lot of deep thought ... for about two and a half seconds. For a second I thought, ‘who is behind the wind up?’ because you don’t get that lucky. But how do you say no?”

The artist, who maintains his anonymity, called it “a festival of art, amusements and entry-level anarchism. This is an art show for the 99% who’d rather be at Alton Towers.”

There is much to laugh at – the “I am an imbecile” helium balloons, the back-of-your-head caricature artist – but a big chunk of it is deadly serious and overtly political.

Visitors will be welcomed by depressed staff in pink hi-vis jackets, all recruited when they answered a local paper ad for film extras. Even to get in requires going through a cardboard version of airport security, guards insisting that all squid be left behind.

Word of the project’s true nature emerged this week and newspapers were initially asked not to report details so as not to “spoil the surprise”. When a Guardian reporter visited on Tuesday, security guards shooed him away.

The first official confirmation of the project was made to the Weston Mercury on Thursday when it reported details of a “locals only” day on Friday. Banksy told the Mercury: “I hope everyone from Weston will take the opportunity to once more stand in a puddle of murky water eating cold chips to the sound of crying children.”

The first journalists were allowed in on Thursday morning. Ironically, given Banksy’s mania for anonymity, photo ID was insisted upon.

Demand for tickets is expected to be wildly high. A Banksy show at Bristol city museum in 2009 attracted more than 300,000 visitors over 12 weeks and was estimated to have generated £10m for the local economy.

Organisers say the show will offer an escape from mindless escapism. What does it all mean? “I guess you’d say it’s a theme park whose big theme is – theme parks should have bigger themes,” said Banksy.